Frank Wang Case Study – The First Drone Billionaire

Frank Wang dreamed of owning a model helicopter as a child, but when he first received one in high school, he promptly crashed it. Since then, much of Mr. Wang’s life has revolved around making remote-controlled aircraft easier to fly, mostly by putting computers on board to handle the difficult task of stabilizing the craft.

He founded SZ DJI Technology Co. in his Hong Kong dorm room in 2006. Several years later, DJI helped launch the consumer-drone craze by bringing to market lightweight, four-propeller helicopters that are easy to fly, shoot stable high-definition footage, and cost around $1,000. The Chinese company has sold hundreds of thousands of its Phantom drones, enabling filmmakers, hobbyists and journalists to document the world from a new vantage point. DJI is now the world’s largest consumer-drone maker by revenue, expecting to top $1 billion in 2015, roughly eight times the $130 million recorded in 2013, according to people familiar with the company’s financial documents.

Frank Wang Case Study Raising Funding and Risks

As the company raises funding, it could develop drones targeted specifically for commercial or industrial applications, where industry officials expect much of the growth over the next several years. DJI comes with risks. Its Phantom drones have been plagued by so-called flyaways, in which the user loses control of the drone and it flies off. They’ve also been used to start trouble, landing on the properties of world leaders and even starting a brawl at a soccer game in the Balkans when it hovered overhead towing a controversial political banner. More broadly, governments around the world are considering ways to curb potential threats drones pose to air safety, public safety and privacy.

The Federal Aviation Administration, which has largely banned commercial use of drones for years, has proposed rules—expected to be made final in late 2016—that would allow such use but set strict limits, including prohibitions on flights in urban areas and beyond the sight of operators. Drone proponents also worry that one high-profile incident—such as a collision with a passenger jet or a terrorist attack carried out with a small drone—would lead to stifling regulations for the industry.

In an interview with The Wall Street Journal at the company’s Shenzhen, China, headquarters, Frank Wang explained how he started DJI. “This stuff has been my dream since childhood. At elementary school I saw my first model helicopter in a shop. It cost the equivalent of several months’ salary for average people. My family could not afford it. But finally, after I did a good job on my high-school finals, my parents rewarded me with a model helicopter. I assembled it but I wasn’t able to fly it properly because to do that needed months of practice. So when I did try to fly it, the helicopter immediately crashed. It was impossible for ordinary people to fly that machine. Still, I imagined flying those kinds of things everywhere—following the trains and cars in which I rode, or when I climbed mountains with my father. I always imagined something flying beside us that could reach places we could not. Before we started the company, I spent three months intensively working on the project. At that time I was still enrolled at the university, but I skipped all the courses and just went to my home in Shenzhen. I would wake up at 2 p.m. and then work until like 5 or 6 a.m. for days at a time. One time, when I did go back to the university lab, I tried to use my ID card but it didn’t work. My heart sank a little bit, because I thought I was kicked out of college by my professor. But actually I had forgotten to pay my tuition.”

“At the beginning when we started the company four years ago, we made flight-control systems. We focused on the operating system for drones. But it was hard to use, the drones were complicated and the controllability was relatively poor. People couldn’t use it on a larger scale. We felt a multirotor drone should be very simple, very small, very reliable and very cheap. If people could use it the market will be larger. So slowly we went from making the flight-control systems to multirotor drones. I believe that the direction of our company is driven by our initial dream: to make a very easy-to-use product that can realize the human dream to fly. And to make it perform well so that everyone can enjoy it. In addition, we will develop our business in agricultural and industrial and all kinds of fields. The next five to 10 years will be a very exciting period for unmanned aircraft and I am looking forward to the future.”

Frank Wang Case Study – Product Range

DJI manufactures a range of products like flying cameras (ex. Inspire and Phantom series), flying platforms, flight controllers for multi rotors, accessories for helicopters, camera gimballs (aerial, handheld) and ground stations. These products are for industrial, professional and amateur use. Recently, the American Federal Aviation Administration (FAA) proposed some regulations and guidelines to ensure proper operation of these vehicles.

DJI makes professional and amateur flight controllers intended for multi-rotor stabilization control of various platforms or heavy payloads in aerial photography. In addition to the main A2 main controller model (intelligent orientation, landing, home return), there are the IMU (damper module), the GPS-Compass Pro Plus (high end antenna, satellite receiver), the PMU (voltage alarm) and the LED bluetooth indicator (smartphone connectivity).

The DJI Ronin is the company’s first stand alone ground based camera stabilization platform developed for everyday cinematography and aerial film making in professional environments. It is built for professional videography and photography and targets the movie-making industry. By using the 3 individual motors to balance the system the DJI Ronin has the ability to stabilize the camera when moving vigorously. DJI has developed a series of multirotors flying platforms called Flame Wheel (Feng-Huo-Lun or Fenghuolun) for aerial photography in entertainment. In 2013, there was a total of three electrically powered Flame Wheels: the hexacopter Flame Wheel F550, and quadcopters Flame Wheel F330 and Flame Wheel F450. The most recent one is the Flame Wheel ARF KIT.

Frank Wang Case Study – the Phantoms Drone

DJI has also developed a series of quadcopters called the Phantoms that have evolved into an integrated flying system with aircraft, camera, Wi-Fi connectivity, a controller and the pilot’s mobile device. These quadcopters are mainly intended for aerial cinematography and photography applications. The Phantom 2 Vision+ features a camera and a gimbal system manufactured by DJI. It is capable of taking 14 MegaPixel still shots and recording high definition (1080p) video. In comparison, the DJI Phantom 3 Professional, the latest Phantom model to be released can shoot 4K resolution video and take 12 MegaPixel still photos. DJI has also developed a series of hexacopters called Spreading Wings (Gen-Dou-Yun or Gendouyun) for carrying heavy cameras in aerial photography, search and rescue, and surveillance. In 2013, two models have been released as Spreading Wings S800 and Spreading Wings S800 EVO.

DJI unmanned helicopter is a small unmanned helicopter jointly developed by Harbin Institute of Technology (HIT) and Hong Kong University of Science and Technology (HKUST) with DJI. This small unmanned helicopter is intended for high elevation missions and can operate with wind scale of 6. The general designer is Professor Li Ze-Xiang, and the chief designer for software is associate Professor Zhu Xiao-Rui. The unmanned helicopter is completely indigenously developed in China and Hong Kong, without using any foreign technology, except the constellation of GPS satellites developed by other nations on which its navigation relies. Before the Phantom, most highly capable consumer drones were sold to serious hobbyists and required a lot of assembly and know-how. The French company, Parrot, had a simple, popular unit with its A.R. Drone, but that was not a very powerful craft.

Ready to fly out of the box

The Phantom represented the first relatively cheap drone that came ready to fly out of the box, but boasted top of the line flight control systems. They also had a potent pitchman in Colin Guinn, who we met for the first time at SXSW in 2012. North America represents DJI’s biggest market. Mr. Guinn has since left for rival drone maker 3D Robotics, which announced a $50 million round of funding led by Qualcomm. And Parrot recently released its own more powerful quadcopter, the Bebop, taking direct aim at DJI’s Phantom line.

Latest news

November 15, 2016 – two new drones were introduced that now raise the bar for professional imaging: Inspire 2, the best ready-to-fly platform for high-end film and video creators, and Phantom 4 Pro, the smartest and most creative flying camera of its size.

The Future of Drone Products

Up until now, DJI had taken on relatively little outside capital, preferring to bootstrap the business. But as competition heats up, it is considering taking on venture capital to help maintain its lead and potentially branch out into new sectors of the booming drone market.

DJI have clearly proved to be the world leader in unmanned aerial technology.